Newly liberated customers are providing increasing opportunities for flexible office space franchisees
If I was to predict the trends that would shape franchised businesses in 2021 a few months back, would you have believed me? It’s amazing how quickly things can change and thankfully we’re beginning to see some light at the end of the tunnel in the UK across most sectors.
With restrictions easing for the first time this year, it’s refreshing to see diners fill tables at local restaurants, socially distanced coffee catch-ups between friends and the reopening of retail.
You don’t need me to tell you how challenging the past year has been for many of these businesses, in particular for traditional franchise industries such as coffee shops, gyms and hotels.
Having faced periods of closure for the majority of 2020, they have had to pivot their operations and adapt offerings in order to get back up and running in this ‘new normal’.
As the world continues to reopen, there are increasing opportunities to tap into the shifting attitudes and needs of a newly liberated customer base. This is especially true in the case of flexible office space.
In 2020 we witnessed the world’s largest enforced trial of remote working, which is still ongoing. Businesses and employees alike have experienced the full range of benefits that a hybrid working model can offer, from a better work-life balance to reduced overheads.
However, unlike other sectors, the changes to when and where we work are here to stay long-term. We know that most people now prefer to work closer to home and because of this there’s a huge unmet demand for investment in meeting these needs.
Reflecting on how the flexible workspace market has fundamentally shifted in the past year, here’s my take on what we can expect for the remainder of 2021:
A broader spectrum of experience and backgrounds
At this moment in time, there’s a high level of unmet demand for professional workspaces countrywide, but particularly in smaller towns and suburbs.
As a result, the profile of potential investors is no longer limited to those who know the city property market well. In fact, it’s the opposite.
Newcomers to the commercial property space spotted the opportunity generated by remote working during 2020. Now experienced franchisees from a wide range of backgrounds are also realising the stability that diversifying into new sectors can bring to their portfolio.
However, they need to move at pace or risk missing one of the most popular investment opportunities of 2021.
More people will become their own boss
If there was one word that could sum up working in 2020 it would have been flexible. Not only in terms of working away from the office and setting up base at home but also in how professionals view their roles and career aspirations.
In some cases, additional time at home allowed more headspace to reset and as a result, we’ve seen an increasing number of people starting new businesses or creating that side hustle they’ve always dreamed of.
Aside from this, concerns still linger around job security in some sectors and if the opportunity presents itself I would expect that we continue to see people becoming their own boss and potentially taking the leap into franchising.
A return to an office that’s closer to home
According to IWG research commissioned in September 2020, six in 10 workers still want to work in an office for at least part of the week - but one closer to home. 77 per cent even say that this is a must-have for their next job move.
In the first quarter of this year, we’ve seen demand for office space in commuter hot spots such as Welwyn Garden City, Bromsgrove and St Albans climb by over 50 per cent compared to the same period last year. In fact, since the start of 2021, we’ve had an increase of one million new users overall.
Some large businesses are already waking up to these demands from their employees.
Standard Chartered now offers its 95,000 employees the option to work from any of IWG’s 3,500 offices worldwide, while global telecoms company NTT recently signed a similar deal for its 300,000 employees.
While all this is good news for the flexible office industry, it also looks like it will have a positive impact on local economies and other franchise sectors, such as gyms and hospitality. With many people now working outside of a city for at least part of the week, there’s a greater need to serve the influx of this more flexible workforce in suburban locations.
More demand for smaller spaces
With more people looking for a work base close to home and the continued focus on maintaining social distancing, the demand for smaller individual workspaces rather than larger open plan work areas will continue to grow.
This trend played out in our sales last year when we observed a 19 per cent increase in interest for our one-two person workspaces compared to pre-pandemic levels - and it’s one that will be a key consideration for office space franchisees in the next year.
A future of flexibility
There’s no doubt about it that how we live and work has changed for the long term and in some cases for the better.
The concept of hybrid working has banished the expectation of a two-hour commute and made the traditional five days based at a company headquarters a rarity.
Everyone, from businesses to employees, has realised what the benefits of being closer to home can offer and there’s now a huge investment opportunity for franchisees to be a part of this change and fill a gap in demand.
Julian Chambers is head of franchise at IWG, operator of Regus and Spaces.